The New Monetary Policy Framework – What it Means
- C. Rangarajan
- Feb 2020
- National Institute of Public Finance and Policy (NIPFP)
- India
Former Governor of India's Central Bank and renowned economist, Mr. C Rangarajan re-examines the inter-play of economic growth, price stability, inflation and lays emphasis on the enunciation of objectives as a guide to action. He states, "The choice of a dominant objective arises essentially because of the multiplicity of objectives and the inherent conflict among such objectives. Faced with multiple objectives that are equally relevant and desirable, there is always the problem of assigning to each instrument the most appropriate objective. This “assignment rule” favours monetary policy as the most appropriate instrument to achieve the objective of price stability."
